Ruralco Holdings (RHL)

Shares in
Ruralco
may have backed off after hitting a more than three-year high of $3.60 at the end of May, but the stock is still seen as one of the best positioned to benefit from booming soft commodity prices. The Hobart-based company reported a strong first-half report. Its net profit jumped 31.5 per cent to $10.2 million, as revenue increased 14.9 per cent to $493.7 million, due to strong seasonal conditions in eastern Australia and improved operating efficiencies. Ruralco specialises in rural merchandise and services such as fertilisers and financial services to primary producers. Its good run is expected to continue with consensus estimates forecasting a near doubling in earnings before interest, tax, depreciation and amortisation to $40.3 million. The severe drought conditions afflicting the southern US farmlands could also well provide an additional boost to the local industry.